By  on February 5, 2007

WASHINGTON — Department stores added a seasonally adjusted 2,100 jobs last month, compared with December, reversing recent declines, and bucking the trend of apparel and accessories stores, as well as textile and apparel producers, trimming payrolls.

A spate of consolidations, including Federated Department Stores' acquisition of May Department Store Co., and intense competition have taken a significant toll on employment in the sector. Department stores have eliminated 50,800 positions since January 2006 and employ 1.5 million people.

Apparel and accessories stores fared better over the last 12 months, adding 28,200 jobs. However, they cut payrolls by 6,700 in January compared with the previous month. Apparel and accessories stores employ 1.5 million people.

Under continued pressure from imports, textile mills shed 3,800 jobs in January to employ 181,500, as textile product mills reduced payrolls by 500, to 157,100. Apparel producers cut 700 jobs to employ 229,500.

"The danger is that the decline of the textile and apparel industry here will accelerate and individual plants will lose the scale needed to maintain a healthy diversity of products," said Charles McMillion, president and chief economist of MBG Information Services.

Overall, the U.S. economy added 111,000 jobs, less than the 150,000 projected by economists. A total of 206,000 jobs were added in December.

The unemployment rate rose to 4.6 percent from 4.5 percent in December.

"The employment figures suggest moderate growth, while slower wage increases are consistent with lower inflation," said Nigel Gault, Global Insight's chief U.S. economist, in a report.

Gault said the report supported the view that the Federal Reserve would hold its key federal funds interest rate steady at 5.25 percent.

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